Analysts at Allium identified five significant profitable short positions on ZEC at Hyperliquid, totaling over $72 million, opened on May 25-26—just days before a vulnerability was found in the Orchard pool.
Source: Allium.The critical bug was revealed on May 29, but the information was made public only on June 5. Amid discussions of the incident, the price of ZEC plummeted from $685 to a local low of around $250.
According to Allium, trading volume for the coin surged on Hyperliquid on May 26. That day, the peak hourly turnover reached $283 million—approximately 12-13 times higher than the usual level.
Source: Allium.Additional pressure came from former BitMEX CEO Arthur Hayes, who announced on July 4 that he had sold his entire position in ZEC.
The most active hour occurred on June 5, when trading volume for Zcash on Hyperliquid exceeded $560 million—at that moment, the coin's price was near its bottom.
The vulnerability in Orchard, present in the contract since its launch in May 2022, allowed for the issuance of an unlimited amount of ZEC. Due to the opaque nature of Zcash transactions, no one, including the developers, can prove that the bug was not exploited in practice.
The blockchain team fixed the issue through a soft fork and a hard fork.
Allium emphasized that the timing coincidence does not prove early access to information. The wallet data shows trading behavior but does not explain motives. Additionally, the report only covers Hyperliquid futures and does not include spot markets on Coinbase, Binance, and other centralized exchanges.
It is worth noting that the Zcash team has agreed on consensus changes for the Ironwood upgrade. This upgrade is expected to launch a new secure pool and limit the supply of ZEC.